It’s difficult to feel sorry for oil giants who are able to make huge amounts of money despite shirking safety regulations that may have made the largest oil spill in U.S. history avoidable. They are right up there with banks that charge huge and often hidden fees for things that most associate with regular banking practices, and paedophiles who complain their court appointed attorney didn’t do enough for them despite their prior convictions.
Not to defend BP plc (NYSE:BP) (LON:BP) or banks too much – that’s Fox News’ job – but a lack of governmental regulation in the United States must take a fair bit of criticism as well, especially as it applies to the Deepwater Horizon spill. The U.S. department of Energy has far too few inspectors with far too little training. A work load and predicament that resembles your average teacher’s in an inner-city school.
Today BP plc (NYSE:BP) (LON:BP), in its Annual Report, showed its displeasure in the March 5th ruling by a New Orleans court where BP is battling to cap the damages it owes. Earlier BP had earmarked $8.5 billion to address “Economic and Property Damages” but fears that number is certain to grow.
It comes as no shock to read that BP plc (NYSE:BP) (LON:BP)’s payout administrator viewed the settlement differently and that the British company plans a full appeal.
From the Annual Report:
“BP strongly disagrees with the ruling of 5 March 2013 and the current implementation of the agreement by the claims administrator,” it said.
“BP intends to pursue all available legal options, including rights of appeal, to challenge this ruling.”
“….the inherent uncertainty that exists… (over) the higher number of claims received and higher average claims payments than previously assumed”.
“If BP is not successful in its challenge to the court’s ruling, a further significant increase to the total estimated cost of the Settlements will be required,”
This is by no means a big surprise. The U.S court system is known for it’s higher than average payouts. Additionally, as more and more people became aware that they might be eligible for a settlement, more and more have invariably joined class action suits where their claims have yet to even be processed.
Again, tough to feel bad for the big guy when my aunt, a Florida travel agent, whose business dried up as the oil ran scatter-shot for months, has yet to see her potential settlement addressed.
At the end of the day, BP plc (NYSE:BP) (LON:BP) will be just fine, even if it’s further fined and forced into more settlements.